MODULAR HOMES THAT are being built to house Ukrainian refugees are set to cost around €436,000 each – twice the initial cost estimated by the Office of Public Works (OPW).

A report by the Office of the Controller and the Auditor General has found that, alongside significant delays and a much higher cost than anticipated, the project at one point did not comply with public spending rules.

The original plan for the ‘proof of concept’  programme was to construct 500 units at a cost of €200,000 each by February 2023, just eight months after the proposal was approved by the government.

However, most of the homes were only delivered in the last year and some have yet to be completed.

Revised figures show the cost of each unit ballooned 120% to €436,000 each, bringing the total cost of the programme to €285 million.

The report states that the roll-out of the programme was classified by the government as a ‘matter of extreme urgency’ for procurement purposes, due to the need to deliver the modular units within a tight timeframe.

“The OPW procured the main contractor for the project using the negotiated procedure without prior advertisement.”

The prototype design was developed by the OPW in conjunction with the Construction Industry Federation and the units have an expected life of 60 years.

Public Spending Code

In November 2022, the Department of Public Expenditure provided sanction for capital investment of €100 million for delivery of the modular units and an annual allocation of €1.25 million for their maintenance from 2023 onwards.

This was subject to a number of conditions, including full compliance with the Public Spending Code.

However, the examination team found that the Department of Integration did not prepare a strategic assessment report or business case reports, as required by the Code for projects costing more than €100 million.

Independent external assessments were also not carried out at the prescribed key decision points.

The Department of Integration argued that, while the Public Spending Code and other requirements, such as procurement, “were substantially complied with”, the programme delivery timeframe “required that certain elements had to be bypassed or addressed in an alternative or accelerated manner”.

Delays

So far 572 homes have been completed, but 82 units at Haywood, Clonmel are delayed to April 2025 due to disruptions from ongoing protests at the site.

Once complete, the modular homes will house 2,640 Ukrainian refugees.

The delays, the report says, were caused by “significant fluctuation, much of which was due to the uncertainty associated with site availability”.

Sites owned by the OPW, county councils, the Department of Agriculture and the HSE are being used for the homes. They are located around the country in counties including Cork, Cavan, Sligo and Tipperary.

While the availability of sites was uncertain, dozens of the modular units had to be put in storage, at an extra cost of €620,000.

The OPW stated that this was due to unforeseen circumstances – the withdrawal of two sites and extensive archaeological finds on one site.